California Supreme Court to Hear Oral Arguments on case concerning the scope of the Administrative Exemption from California's Overtime Requirements

By Jonathan Judge

The California Supreme Court will hear oral arguments on Monday, October 3, 2011 in Harris v. Superior Court (Liberty Mutual Insurance). The California Supreme Court granted review of Harris almost four years ago on November 28, 2007, and identified the issue to be decided as follows:

Do claims adjusters employed by insurance companies fall within the administrative exemption (Cal. Code Regs. tit. 8, section 11040) to the requirement that employees are entitled to overtime compensation?

Although the case concerns claims adjustors, it is expected that the Court's decision may affect millions of California employees working in administrative positions, and provide clarification when and under what circumstances such employees are exempt from California's overtime and other requirements. It has not always been clear when and to whom the exemption applies, which has lead to considerable class action litigation over the last several years.

In this case, the Court of Appeal held that claims adjusters were not exempt. Central to the Court of Appeal's holding was the so-called "administrative/production dichotomy." Under the administrative/production dichotomy, employees do not qualify for the administrative exemption if they are primarily engaged in work that is considered production, or in a retail or service establishment, sales work, as opposed to work that is directly related to management policies or the general operation of the business, i.e., running of the business. The Court of Appeal found that the adjusters' work, investigating and estimating claims, making settlement recommendations, and identifying fraud, among others, was not carried out on the level of management policy or general operations, but rather was part of the day-to-day operations of Liberty Mutual's business. Therefore, the work did not qualify for the administrative exemption, according to the Court of Appeal.

While Atkinson, Andelson, Loya, Ruud & Romo is not involved in this case, Robert R. Roginson, a Partner with the firm's Employment Services Practice Group, and former Chief Counsel for the California Division of Labor Standards Enforcement, commented on the significance of the Harris case in today's Daily Journal. Roginson noted that the administrative exemption has historically been difficult to understand, making clarification of the issues in Harris important because of the exemption's application to a broad category of employees. It is hoped that the court will provide some clarity on the application of the administrative/production dichotomy, because, according to Roginson, it seems unrealistic to expect employers and enforcing agencies to comply with or enforce the law when the rules are unclear.

Please check back next week for further analysis of this case following the conclusion of oral arguments.

Labor Commissioner Files Multi-Million Dollar Lawsuit Against Real Estate Brokerage For Alleged Wage And Hour Violations

By Christopher S. Andre And Scott K. Dauscher

In a press release issued today, the California Department of Industrial Relations announced that Labor Commissioner Julie Su, filed in the Alameda County Superior Court a lawsuit seeking damages and penalties in excess of $17 Million against ZipRealty for alleged wage and hour violations.  Click here to download and read a copy of the lawsuit. 

The lawsuit Ms. Su filed in the Alameda County Superior Court falls on the heels of  an action in Kern County Superior Court.  In that case, Zip Realty filed an appeal of a Labor Commissioner administrative award of $75,000 based on wage claims filed by four former Zip Realty agents.  On appeal, the court quadrupled the $75,000 administrative award and awarded the four agents over $330,000 for alleged damages and interest.  As part of that proceeding, Zip Realty argued it was not required to pay its real estate agents minimum wages or overtime wages because the agents were outside salespersons.  The court rejected that defense because the court ruled the agents did not qualify for the outside salespersons exemption because the court found the agents spent less than 50% of their working time working outside the office.

These developments provide two important takeaways for California employers:

First, we think federal and state agencies charged with enforcement of federal and state employment laws have taken a more aggressive enforcement posture.  

Second, the developments serve as a reminder that the requirements of the exemptions for minimum wage, overtime, meal period, and rest period requirements generally applicable to non-exempt employees must be strictly complied with in order for the employer to rely on the exemption.  For example, under California law, outside salespersons qualify for the exemption if the outside salespersons is at least 18 years old and "customarily and regularly works more than half the working time away from the employer's place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities."  Under federal law, outside salespersons qualify for the exemption if the employee's primary duty is making sales (as defined in the Fair Labor Standards Act) or obtaining orders or contracts for services for which the consideration will be paid by the client or customer and if the employees is "customarily and regularly engaged away from the employer's place or places of business in performing such primary duty."

Improperly classifying an employee as exempt when the requirements for the exemption are not met can create substantial exposure for the employer.  For example, under California law, if an employee is improperly classified as exempt, the employer can be exposed to claims for unpaid premium pay (i.e., overtime pay)  if the employee worked more than 8 hours in a day or more than 40 hours in a workweek, to claims for the employer's failure to provide required meal periods or failure to authorize and permit required rest periods, and to claims for non-compliant wage statement penalties, among other things.  This can occur when the employer, because the employee is classified as exempt, does not pay the employee for all hours worked, does not record all hours worked, does not provide or record meal periods, does not authorize and permit rest periods, and does not include on the employee's wage statements all of the information an employer is required to provide on wage statements issued to non-exempt employees.  Currently, such claims are predominantly brought as class actions, which raises the stakes even higher.

 

DFEH Launches Clinic To Train Students To Become DFEH Investigators

By Christopher S. Andre and Thomas A. Lenz

As we previously reported here, in May, it was announced that the Department of Fair Employment and Housing ("DFEH") would begin a new collaborative effort with the University of California at Irvine School of  Law to combat allegations of systemic discrimination.  The DFEH and UC Irvine established a clinic in which law students will assist DFEH agents on tasks which include evaluation, investigation, and prosecution of discrimination claims.  

On September 27, 2011, the DFEH announced a similar partnership with the California State University Bakersfield School of Business and Public Administration to establish a similar clinic for graduate students.  The DFEH press release, available here, states "[t]he partnership's goals are closely aligned with the department's mission to train future professionals to investigate and resolve employment discrimination complaints and to develop a pipeline for students interested in serving the state with the DFEH and other related state agencies."   The press release goes on to state: "In the DFEH-CSUB clinic, Master of Public Administration students will study legal theory and investigative techniques, and apply that knowledge to investigating individual employment discrimination complaints."

Employers facing DFEH or other administrative claims arising in the workplace may well see heightened activity on their cases through these partnerships with law schools and universities, which the DFEH describes as a means to develop the "civil rights leaders of the future."

Judge Orders Reinstatement of Employees Who Were Terminated For Facebook Postings

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, the National Labor Relations Board has recently filed complaints against a number of employers alleging the employers unlawfully terminated or disciplined employees who posted on social media websites, such as Facebook, statements critical of their working conditions.  In one press release, the NLRB states such discussions were "protected concerted activity within the meaning of Section 7 of the National Labor Relations Act, because it involved a conversation among coworkers about their terms and conditions of employment, including their job performance and staffing levels."

In a recent case against Hispanics Untied of Buffalo (HUB), an administrative law judge hearing the NLRB's complaint, in a ruling the NLRB described as "the first of its kind," ordered HUB to reinstate five employees who HUB terminated after the employees posted on Facebook statements critical of their working conditions.  HUB is a nonprofit organization that provides social services to disadvantaged clients.  Comments posted on Facebook in response to a Facebook posting by a co-worker regarding another co-worker's criticism of her work performance reportedly include, among others the following inflammatory statements:

I think we should give our paychecks to our clients so they can 'pay' the rent, also we can take them to their Dr's appts, and served as translators (oh! We do that).  Also we can clean their houses, we can go to DSS for them and we can run all their errands and they can spend their day in their house watching tv, and also we can go to do their grocery ship and organized the food in their house pantries . . . (insert sarcasm here now).

The administrative law judge ruled the terminations violated Section 8(a)(a) of the National Labor Relations Act because the administrative law judge found that the employees' Facebook postings amounted to "protected concerted activity.  Section 7 of the NLRA states "employees shall have the right to self-organization, to form, joint, or assist labor organizations, to bargain collectively through representation of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. . ."

 As we previously observed, employers should be aware that both the NLRA and the California Labor Code generally prohibit discipline of or discrimination against employees for disclosing to others the amount of their wages or information about the employees' working conditions.  In light of those prohibitions and in light of the recent enforcement activity by the NLRB, employers should consult with experienced employment and labor law counsel when considering discipline of employees on  account of  communications related to or potentially related to employees' wages, hours, and/or working conditions.

Governor Brown Signs, Considers, Several Employment-Related Bills Passed by the California Legislature

by Jonathan Judge and Robert R. Roginson

The 2011 California legislative season is coming to a close. Below is a summary of the employment-law-related bills that were signed or are pending before the Governor. The Governor has until October 9, 2011 to consider, and sign or veto the bills passed by the Legislature this year.

Bills Signed by Governor Brown

SB 272 (DeSaulnier) Leave of Absence: Organ Donation - This bill provides that the days of leave for purposes of bone marrow and organ donation leave are business days rather than calendar days, and that the one-year period is measured from the date the employee’s leave begins and consists of 12 consecutive months. This bill also provides that such a leave of absence is not a break in the employee’s continuous service for the purpose of his or her right to paid time off. This bill further provides that the employer may condition the initial receipt of leave upon the employee’s use of earned but unused days for paid time off. Additionally, the bill states that it is declaratory of existing law.

SB 559 (Padilla) Discrimination: Genetic Information - This bill prohibits discrimination under the Fair Employment and Housing Act and Unruh Civil Rights Act on the basis of genetic information. "Genetic information" means, with respect to any individual, information about any of the following: (i) the individual’s genetic tests; (ii) the genetic tests of family members of the individual; (iii) the manifestation of a disease or disorder in family members of the individual. Genetic information includes any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or any family member of the individual. Genetic information does not include information about the sex or age of any individual.

AB 587 (Gordon) Public Works/Volunteers - This bill extends the repeal date from January 1, 2012, to January 1, 2017, for the law that exempts specified work performed by a volunteer, a volunteer coordinator, or a member of the California Conservation Corps or a community conservation corps from public works provisions.

AB 240 (Bonilla) Wage Recovery: Liquidated Damages - This bill permits an employee to recover liquidated damages pursuant to a complaint brought before the Labor Commissioner alleging payment of less than the minimum wage.

Bills Pending On Governor’s Desk

AB 22 (Mendoza) Consumer Credit Reports - This bill would greatly limit employers’ ability to obtain a consumer credit report for employment purposes, with exceptions for certain financial institutions, and a limited number of other job classifications.

AB 267 (Swanson) Employment Contracts - This bill would make void and unenforceable as against public policy any provision in an employment contract that requires an employee, as a condition of obtaining or continuing employment, to use a forum other than California, or to agree to a choice of law other than California law, to resolve any dispute with an employer regarding employment-related issues that arise in California.

AB 243 (Alejo) Labor Contractors - This bill would require an employer who is a farm labor contractor to disclose in the itemized wage statement the name and address of the legal entity that secured the employer’s services.

AB 325 (Lowenthal) Bereavement Leave - This bill would allow for four days unpaid leave for bereavement purposes upon the death of a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or domestic partner’s child, within 13 months of the death of the bereaved individual. The provisions of the bill would not apply to an employee who is covered by a valid CBA that provides for bereavement leave and other specified working conditions.

AB 436 (Solorio) Prevailing Wages - This bill would make revisions regarding the method by which the Department of Industrial Relations sets reimbursement rates and enforcement of public works projects financed in any part by the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002.

AB 469 (Swanson) Wages: Civil Penalties - This bill would provide that in addition to being subject to a civil penalty, any employer who pays or causes to be paid to any employee a wage less than the minimum fixed by an order of the Industrial Welfare Commission shall be subject to paying restitution of wages to the employee. This bill would extend the period within which the division may commence a collection action from 1 year to 3 years. This bill would require an employer to provide each employee, at the time of hiring, with a notice that specifies the rate and the basis of pay and to notify each employee in writing of any changes to the information set forth in the notice within 7 calendar days of the changes unless such changes are reflected on a timely wage statement or another writing.

AB 514 (Hernandez) Prevailing Wages: Hauling Refuse - This bill would include in the definition of "hauling of refuse" the hauling of specified materials other than certain recyclable metals, thereby expanding the definition of "public works" and thus requiring the payment of prevailing wages for that activity.

AB 551 (Campos) Prevailing Wages: Penalties - This bill would increase penalties assessed to contractors and subcontractors found to have violated prevailing wage laws.

AB 592 (Lara) Leaves - This bill would make it an unlawful employment practice for an employer to interfere with, or restrain the exercise or attempted exercise of, any right provided to an employee under the CFRA or Pregnancy Disability Leave law.

AB 766 (Monning) Public Works - This bill would require nonredacted copies of certified payroll records to be provided, upon request, to any agency included in, and for the purposes of, the Joint Enforcement Strike Force on the Underground Economy, or to any law enforcement agency.

AB 887 (Atkins) Gender Discrimination - This bill would make changes to state discrimination law by refining the definition of gender to include a person’s gender identity and gender expression. Gender expression would be defined as meaning a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.

AB 1236 (Fong) Use of E-Verify - The bill would prohibit the state, a city, county, or special district, from requiring an employer other than one of those government entities to use an electronic employment verification system (E-Verify) except when required by federal law or as a condition of receiving federal funds.

AB 1396 (Committee on Labor & Employment) Commissions Agreements - This bill would require all employers, within the state, or from out-of-state, to enter into written contracts of employment where commissions are a method of payment with the employee for services rendered in the state.

SB 129 (Steinberg) Agricultural Labor Relations - This bill would revise election, bargaining, and unfair labor practice procedures before the Agricultural Labor Relations Board.

SB 299 (Evans) Pregnancy Leave - This bill would prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes Pregnancy Disability Leave.

SB 459 (Corbett) Independent Contractors - This bill would prohibit willful misclassification of individuals as independent contractors. The bill would also authorize the Labor Commissioner to assess civil and liquidated damages against a person or employer based on a determination that the person or employer violated these prohibitions.

SB 757 (Lieu) Health Insurance Plan Discrimination - This bill would prohibit group health insurance plans or policies from discriminating in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex.

SB 922 (Steinberg) Project Labor Agreements - This bill would provide that if a charter provision, initiative, or ordinance of a charter city prohibits the governing board’s consideration of a project labor agreement for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by such an agreement, then state funding or financial assistance may not be used to support that project.

Please check back in the coming weeks for updates on these bills as they face consideration by the Governor.

Required NLRB Notice Of Labor Rights Employers Must Post Beginning November 14, 2011, Is Now Available For Download

By Thomas A. Lenz and Christopher S. Andre

As we previously reported here, in an announcement dated August 25, 2011 the National Labor Relations Board confirmed the approval of a final rule which requires all employers under NLRB jurisdiction to post a Notice which will inform employees of their rights. Those rights include the rights to form and join unions and to engage in concerted activities for mutual aid and protection, which may include group protests over working conditions or demands for workplace change through social media.

Employers will be required to post a hard copy Notice, which is now available from the NLRB, and which can be downloaded and viewed by clicking here.  Where an employer communicates with its employees by electronic means, such as Internet or Intranet, the employer may have a duty to post the Notice electronically as well.

As we previously reported here, also, many employers who are unfamiliar with the NLRB or who have not dealt with it in many years may doubt that they are subject to NLRB jurisdiction. Those employers should consider carefully their course of action. NLRB has exercised a broad view of its jurisdiction, with dollar volume standards that have not changed in decades. Absent a detailed review with legal counsel establishing otherwise, the vast majority of private sector employers should consider themselves subject to NLRB and expect to have to comply with the rule.

Barring a court order preventing enforcement of the NLRB's final rule, all employers subject to the NLRB's jurisdiction must post as required the Notice beginning on November 14, 2011.

Private sector employers are encouraged to seek guidance on how this new NLRB rule will impact their business and communications with employees. 

 

President Obama's Department of Labor Set to Significantly Expand Employers' Reporting Requirements Under Labor-Management Reporting and Disclosure Act

By Scott K. Dauscher and Thomas A. Lenz

On June 21, 2011, the United States Department of Labor, Office of Labor-Management Standards, issued a little-known Notice of Proposed Rulemaking whereby the DOL seeks to expand the scope of and requirements of the Labor Management Reporting and Disclosure Act of 1959 (29.U.S.C. 433).  The proposed rule reverses long-standing practices under the law and subjects employers and those who provide advice to employers regarding union activities, such as attorneys and labor consultants, to increased reporting requirements.  The public comment period ends on September 21, 2011, and the new rule is expected to be adopted shortly thereafter.  The proposed rule has been viewed by some in the business community as a political favor for unions designed to enhance their ability to unionize employees.  A copy of the proposed rule and the opportunity to submit comments can be viewed by clicking here.  

Employers subject to union organizing campaigns or collective bargaining negotiations often retain the services of third-parties, whether they be attorneys, labor consultants or other advisors, to provide advice for responding to union organizing campaigns.  Under the current LMRDA, employers and labor consultants must file public disclosure documents, including the amount paid to the consultant, with the Department of Labor when the consultant engages in activities to persuade employees whether and how to exercise their right to organize and collectively bargain.  (29 U.S.C. 433(a)). 

The LMRDA contains an exemption, however, from the reporting requirements for persons giving "advice" to the employer.  This "advice exemption" has been interpreted to include advice that can be accepted or rejected by the employer and that is contained in a prepared speech or other written material, provided the employer, not the consultant, is the one interacting with the employees.  In such circumstances, the consultant does not interact with the employees directly, but simply meets with the employer and advises on how to persuade the employees on the issues of unionization.

Under the new rule proposed by the DOL, the interpretation of the "advice exemption" is severely limited, thereby greatly expanding the scope of the LMRDA.  The new rule, if adopted, would limit the "advice exemption" to an "oral or written recommendation regarding a decision or course of conduct."  (NPRM, FR, June 21, 2011.)  The narrow definition of "advice" proposed by the DOL would expand the scope of the LMRDA to cover activities historically considered exempt from the rule.  Any other activity by a third party advisor would be subject to the disclosure requirements of the rule if that activity that has the "potential" to persuade employees regarding union representation. 

This rule is so broad that it could include almost anything, such as writing or producing written materials for speeches made by the employer to its employees, crafting training materials, training supervisors and other management employees, and drafting employee policies or any other activity which could arguably be considered as "having the potential to persuade employees regarding union representation."  Thus, even if a third party advisor's activity is wholly unrelated to unionization, if it indirectly could affect an employee's choice to become union or not, the activity would be subject to the reporting requirement of the new rule.

In addition to re-defining the "advice exemption" and expanding the scope of the LMRDA, the new rule would create new reporting requirements.  Employers will be required to report internal costs, including wages paid, for these activities.  The reports filed by the employer will be made public for all to see, including the employees and the union.  

Under the LMRDA, officers of a company are personally responsible for filing the required reports and their accuracy.  Penalties for failing to file an accurate disclosure statement include criminal prosecution and civil liability.

We will report here on any further developments.  In any event, employers should seek counsel from experienced labor attorneys about potential LMRDA reporting obligations if and when employee relations advice is obtained. 

The DOL, IRS, And 11 States Team Up To Battle Worker Misclassification

By Robert R. Roginson

The Unites States Department of Labor (DOL) and Internal Revenue Service (IRS) have signed a memorandum of understanding to improve the agencies' coordination on employee misclassification compliance and education, according to a press release issued today by the Secretary of Labor, Hilda Solis.  The DOL reports that 11 states have also agreed to sign similar memoranda.  A copy of the press release is available here.

According to the DOL, the purpose of the coordinated effort is "to end the business practice of misclassifying employees in order to avoid providing employment protections."  The labor commissioners and other agency leaders representing seven states have signed memoranda of understanding with the DOL.  The signatory states are Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington.  The states of Hawaii, Illinois and Montana, as well as with New York's attorney general are also identified as states expected to sign similar agreements.

The DOL expects that the memoranda of understanding will enable the DOL to share information and coordinate law enforcement with the IRS and participating states in order “to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.”

These memoranda of understanding arose as part of the department's Misclassification Initiative, which was launched under the auspices of Vice President Biden's Middle Class Task Force with the goal of preventing, detecting and remedying employee misclassification.

Although California is not listed among the states which have signed or intend to sign the memorandum, California employers should be aware that worker misclassification has long been a high priority for the California Labor Commissioner, Attorney General and Employment Development Department.  Worker misclassification has also become a target for class action lawsuits.  The consequences for misclassifying workers can be significant and include claims for unpaid wages and overtime, meal and rest period premiums, payroll taxes, and penalties among other things.

We will continue to bring you any developments in the increasingly important area of employment law.

President Obama's American Jobs Act Would Make It Illegal for Employers to Discriminate Against Someone Who Is Unemployed

By Scott K. Dauscher and Christopher S. Andre

Last Thursday, President Obama addressed a joint session of Congress and announced his American Jobs Act.  On Monday, President Obama formerly presented the Bill to Congress.  Among the provisions included the 155-page Bill but which the President did not announce in his speech last week is the "Fair Employment Opportunity Act of 2011".  This law, if passed, would make it an unlawful discrimination practice for an employer to deny employment (i.e., decline to hire) an individual on account of the applicant's unemployment.  In short, President Obama's proposed law would make being unemployed a protected class on par with other protected classes such as race, color, religion, national original, age, and sex.  Specifically, Section 374 of the Americans Jobs Act makes it unlawful for employers to:       

        (1)    publish in print, on the internet, or in any other medium, an advertisement or announcement for en employee for any job that includes           

            (A)    any provision stating or indicating that an individual's status as unemployed disqualifies the individual for any employment opportunity or

            (B)    any provision stating or indicating that an employer will not consider or hire an individual for any employment opportunity based on that individual's status as unemployed, or

        (2)     fail or refuse to consider for employment, or fail or refuse to hire, an individual as an employee because of the individual's status as unemployed; or

        (3)    direct or request that an employment agency take an individual's status as unemployed into account to disqualify an applicant for consideration, screening, or referral for employment as an employee.

The proposed law contains similar provisions specifically applicable to Employment Agencies.

The proposed law would provide various federal agencies the power to administer and enforce the Act.  The proposed law provides that the Equal Employment Opportunity Commission shall have the same powers under the new law as it does under other non-discrimination laws.  The procedures applicable to a claim by an individual for a violation of the new law are the same procedures that apply for a violation of Title VII of the Civil Rights Act of 1964.

Additionally, the American Jobs Act would allow individuals to file lawsuits against employers who they allege violated the Act.  In any such lawsuit alleging violation of the advertising provision, the Bill provides that the individual, or any person acting on behalf of the individual, may obtain an injunction enjoining the unlawful employment practice, reimbursement of costs expended as a result of the unlawful employment practice, an amount equal to liquidated damages not to exceed $1,000 for each day of the violation, and reasonable attorney's fees, including expert fees, and costs attributable to the pursuit of the claim. 

In any lawsuit alleging a violation of any other provision of the law, including the denial of employment due to one's unemployment status, the Bill provides that the individual bringing suit, or any person acting on behalf of the individual, may be awarded the same remedies as are available under the Civil Rights Act of 1964, such as front pay, injunctive relief, reasonable attorney's fees and costs, compensatory damages for pain and suffering, and punitive damages, except that in a case in which wages, salary, employment benefits, or other compensation have not been denied or lost to the individual, damages may be awarded in an amount not to exceed $5,000.

Representative Louie Gohmert (R-Texas) expressed concern about the Bill and the lawsuits which could result.  Addressing the issue on the House floor, Rep. Gohmert stated "So if you're unemployed, and you go to apply for a job and you're not hired for that job, see a lawyer.  You might be able to file a claim because you got discriminated against because you're unemployed."  He said this Bill would discourage companies from interviewing unemployed individuals and would "help trial lawyers who are not having enough work.  That's 14 million potential new clients that could go hire a lawyer and file a claim because they didn't get hired even though they were unemployed."

The Bill does provide that it is not intended to preclude an employer or employment agency from considering an individual's employment history, or from examining the reasons underlying an individual's status as unemployed, in assessing an individual's ability to perform a job or in otherwise making employment decisions about that individual.  The Bill states that "Such consideration or examination may include an assessment of whether an individual's employment in a similar or related job for a period of time reasonably proximate to the consideration of such individual for employment is job-related or consistent with business necessity."  However, in any lawsuit the burden will be on the employer to prove the non-discriminatory basis for denial of employment.

Employers and Employment Agencies should stayed tuned to the debate in Congress regarding the American Jobs Act and monitor whether the Fair Employment Opportunity Act of 2011 is included in whatever law is passed.

DFEH Touts $846,300 Administrative Award Against Employer For Allegedly Failing To Reasonably Accommodate Employee's Medical Condition

By Christopher S. Andre and Scott K. Dauscher

In a press released issued today, the California Department of Fair Employment and Housing touts an administrative award of $846,300 against an employer for allegedly failing to accommodate an employee's medical condition and for allegedly terminating the employee "relying on [an] insufficient travel pretext."  The DFEH press release states as follows:

ELK GROVE, CA - The California Department of Fair Employment and Housing (DFEH) today announced its largest-ever administrative award of $846,300 against electrical supplier Acme Electric Corporation for firing an employee because he had cancer.  Headquartered in Lumberton, North Carolina, Acme Electric is a division of Actuant Corporation, a Wisconsin diversified industrial corporation that operates in more than 30 countries.

"This historic administrative victory underscores the Department’s commitment to vindicating the rights of Californians victimized by workplace discrimination,” said DFEH Director Phyllis Cheng.

Charles Richard Wideman worked for Acme Electric as western regional sales manager overseeing sales operations in the company’s largest territory from February 2004 to March 2008.   He developed kidney cancer in 2006 and prostate cancer in 2007.  Mr.  Wideman’s cancers required two surgeries and numerous cancer-related outpatient appointments.  The company immediately granted his two requests for time off for surgery and recuperative leave.  However, Mr. Wideman requested further accommodation for the travel limitation his cancers caused from June 2006 through April 2007.  Acme Electric refused to grant or even acknowledge these accommodation requests.  Instead, in December 2007, Mr. Wideman’s supervisor gave him an unfavorable performance evaluation, criticizing him for insufficient travel.  On February 28, 2008, ignoring Mr.  Wideman's need for accommodation the preceding year and failing to take into account his dramatically improved job performance, Acme Electric fired Mr. Wideman, relying on the insufficient travel pretext.

“California’s Fair Employment and Housing Act (FEHA) provides that persons with disabilities, such as cancer, must be reasonably accommodated, so that they can continue to work productively,” added Director Cheng. 

After a three-day hearing, the State's Fair Employment and Housing Commission found Acme Electrical violated the FEHA by failing to accomodate Mr. Wideman's known travel limitation due to his cancers, failing to engage in a good faith interactive process, discriminating against Mr. Wideman because of his disability, and failing to take all reasonable steps necessary to prevent discrimination from occurring.  To compensate Mr. Wideman for his losses, the Commission awarded him $748,571 for lost wages, $22,729 for out-of-pocket expenses and $50,000 for the emotional distress he suffered.  In addition, the Commission ordered Acme t pay $25,000 to the State's General Fund as an administrative fine.  Acme must further comply with posting, policy changes, and training requirements ordered by the Commission.

In our experience, cases alleging an employer's failure to accommodate an employee's disability or medical condition are on the rise both administratively (i.e., DFEH actions like the one discussed above.) and by way of private lawsuits filed by current or former employees.  Employers should use caution when terminating or otherwise disciplining an employee with a known disability or medical condition to make certain that the termination or other discipline does not run afoul of applicable California law, which is often quite favorable to employees.  Employees with disabilities or medical conditions can lawfully be disciplined or even terminated, but employers should proceed with caution. 

Goodwin Liu's Appointment To California Supreme Court Confirmed: Is The Califorina Supreme Court Now One Step Closer To Deciding The Long Pending Brinker Meal Period Decision?

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, there was little doubt Governor Jerry Brown's appointment of UC Berkeley law professor Goodwin Liu to the California Supreme Court would be swiftly confirmed by the California Commission on Judicial Appointments, consisting of three members:  California Supreme Court Presiding Justice Tani Cantil-Sakauye (appointed by former Governor Arnold Schwarzenegger), California Attorney General Kamala Harris (a Democrat elected in 2010 after serving as the District Attorney for the City and County of San Francisco), and Senior Presiding Justice of the California Court of Appeal  Joan Dempsey Klein (appointed by Governor Brown during his first term as Governor of California).  

As expected, last Wednesday, the Commission on Judicial Appointments unanimously confirmed Mr. Liu as a Justice to fill the seat vacated by former Justice Carlos R. Moreno, who stepped down to take a position in private practice.  

Now that the court is once again fully-staffed with seven members, it remains to be seen when the court will schedule for oral argument and ultimately decide the long pending decision in Brinker Restaurant Corporation v. Superior Court.  

As we previously reported here, the California Court of Appeals decided in Brinker Restaurant Corporation v. Superior Court that an employer's obligation to "provide" to non-exempt employees meal periods required by the Labor Code and the applicable Industrial Welfare Commission Wage Orders is to make those meal periods available and not to ensure that employees take the meal periods provided to them.  

On October 22, 2008, the California Supreme Court granted review of the Court of Appeal's decision in Brinker to decide "the proper interpretation of California's statutes and regulations governing an employer's duty to provide meal and rest breaks to hourly workers."  Nearly three years later, the case still has not been scheduled for oral argument, and it remains to be seen when the California Supreme Court will decide the case.  Since that time, the California Supreme Court has granted review thereby rendering unciteable six Court of Appeal decisions holding as in Brinker that an employer's obligation to "provide" meal periods to non-exempt employees is to make the required meal periods available and not to ensure that non-exempt employees take the meal periods provided to them: Brinkley v. Public Storage, Faulkinbury v. Boyd & Associates, Brooker v. Radioshack Corporation, Hermandez v. Chipotle Mexican Grill, Tien v. Tenet Healthcare, and, most recently, Lamps Plus Overtime Cases.

Although it remains difficult to predict when the California Supreme Court will decide Brinker and difficult to predict how the California Supreme Court will rule on the case, we think Governor Brown's appointment of Mr. Liu increases the likelihood the Supreme Court will decide the case adversely to California employers.

AALRR Ranked Among The 50 Largest Law Firms In California

AALRR was ranked the 36th largest law firm in California by California Lawyer in its annual survey of the state's largest law firms.  AALRR moved up five places in this year's ranking.  Click here to read the full article. 

An "Exempt Professional Employee Is Defined By More Than Just A License"

By Amber M. Solano and Jorge J. Luna

On August 17, 2011, the California Court of Appeal held an employee does not have to be licensed as an attorney to qualify as an exempt employee under "learned professions" exemption of Industrial Welfare Commission Wage Order 4-2001.  This case is significant because it allows an employer to apply the learned professions exemption to individuals who may not be licensed.  Employers can make individual determinations based on an individual's actual education, training, and duties.  This permits a more flexible application of the exemption that takes into consideration the realities of a given situation. 

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